How to create a good cage for baking in cycles?
Cage baking should follow more of less the same principles in any baking system. It is only really necessary to have a custom cage when trying to capture hard edges, smooth organic models shouldn't need one, as the ray distance parameter will effectively create on for you. The purpose of a custom cage is to modify the direction that the rays are cast when determining where to draw the normal info from, which is particularly important form split normals, as otherwise you may miss some directions in the bake (see here).

The best starting point for creating a cage is to just inflate the low poly (this effectively is what the ray distance parameter is doing internally). From there you need to look at you high poly and low poly together and look for problematic hard edges and tweak the cage around these errors. Until you get more experienced, some trial and error will be required. Be aware that Cycles requires that the cage has the same topology as the low poly. 

The blender manual covers cages briefly at the bottom of this page.